Fed Chair Powell reported to congress today that the economy was doing well enough to justify raising interest rates. This news, coupled with good earnings reports was enough for stocks to overcome an initial Netflix related selloff and boost the Dow to a closing gain of 55 points on heavy volume to 25,119.
The Farnborough Airshow is a barn burner as Airbus secured orders for 186 planes on the second day while “The Lazy B” racked up sales of 175 new jets. Narrow body planes are in demand and the A320 neo, along with the 737 Max, are getting about 80% of all orders. Boeing also announced orders for 777 aircraft to be used as freighters.
According to Asian news site NHK World, Japan and the EU signed a free trade deal that will immediately eliminate tariffs on wine, cheese, sake and soy sauce and reduce tariffs on cars after 7 years. The negotiations were tough and well fought on either side. Thankfully, NHK World posted a video clip of the negotiating process. See it here on our FaceBook page. I love these guys and wish the Seahawks would sign a couple of them for the O-Line.
Netflix posted quarterly earnings yesterday afternoon and while the company had a 40% revenue rise and a 467% increase in net income the results were not good enough for the Wall Street crowd and shares traded lower. The driver behind the selloff was that subscriber growth did not meet expectations. In the US, Netflix only signed up 670,000 customers compared to estimates calling for 1.2 million. In the overseas markets NetFlix signed up 4.47 subscribers vs estimates calling for 5.11 million. While I understand why the gurus are disappointed considering the stock is priced for perfection after a big run, I also am amazed at how many people are signing on to this platform.